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Successful Settlement Agreement Enforced

July 13, 2016

Webber v Boutilier, 2016 NSSC 5

The defendants successfully brought a motion to enforce a settlement agreement in a personal injury action.

Background

Webber commenced two separate actions seeking damages arising from a slip and fall accident and motor vehicle accident respectively. Webber and the defendants from the two personal injury actions participated in a joint settlement conference with a view to resolving both claims.

Following a successful settlement, Boutilier and Dartmouth Central Plumbing and Heating (the defendants in the motor vehicle claim) forwarded a release, consent dismissal order, and settlement funds to Webber’s counsel. The release contained a confidentiality clause, confirming that the terms of the settlement were confidential and that Webber would be liable for repayment of the settlement funds if she was found in violation of the confidentiality clause. The release also contained a clause that Webber would indemnify and save harmless Boutilier and Dartmouth Central Plumbing and Heating from any subrogation claims.

Webber’s counsel returned the signed release with an “X” marked through the confidentiality and indemnification clauses. Those paragraphs were also initialed by Webber and her counsel. In response, counsel for Boutilier and Dartmouth Central Plumbing and Heating argued that the settlement agreement was inclusive of all claims, including existing and future subrogation claims, such as potential claims by the Department of Health under the Health Services and Insurance Act, RSNS 1989, c 197.

Decision

The Court found that the settlement reached at the settlement conference was “full and final”, and included a clear understanding that all matters were settled, including any subrogation claims. The all-inclusive basis of the settlement was an essential term of the agreement and Webber must release Boutilier and Dartmouth Central Plumbing and Heating from all claims relating to her action, including any potential subrogation claims.

Lesson for Insurers

Unfortunately, disputes will sometimes arise following a settlement agreement. Although this cannot always be avoided, parties can take precautions to ensure that there is a common understanding of the terms involved. Such precautions may include the use of minutes of settlement or a confirming letter setting out the terms of the agreement.

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A recent decision of the Supreme Court of Newfoundland and Labrador, Mifflin v North Atlantic Refining Limited, 2017 NLTD(G) 140, demonstrates that Employers may be held to a settlement agreement if a consensus is reached on its essential terms, despite there being a continuance of a dispute as to its non-essential terms.

Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.